Tax Issues

There are various income and related tax issues faced by unit owners in homeowner type associations. Due to space limitations, it is not meant to be a comprehensive discussion of these tax issues. Such a document would easily run to several hundred pages. Our hope is that you are made aware of these issues and to stimulate discussions with your professional tax preparer. This paper addresses tax returns filed by individuals. It does not deal with corporations, S-corporations, partnerships, tim [...]

Do you get confused distinguishing between GET, TAT and TOT for Homeowner Associations? Hawaii General Excise Tax (“GET”), Hawaii Transient Accommodations Tax (“TAT”) and the Hawaii Time-Share Occupancy Tax (“TOT”)- these three taxes are based on gross income or receipts. In other words, they are separate and distinct from the Hawaii income tax which is based on the net income. Hawaii GET – It is Not a Sales Tax Referring to the GET as a sales tax is wrong. The GET is an excise tax, not a s [...]

The law is clear that an association’s Board of Directors is responsible for the filing of the annual federal and State income tax returns, regardless of who actually prepares them. In addition, the law imposes a fiduciary duty on directors. As a result, Board members should take an active role in understanding the tax issues involved because a substantial overpayment or underpayment of an association’s income taxes could be construed as a breach of their fiduciary duty. This memorandum deals [...]